Verizon, AT&T and T-Mobile shares fall after SpaceX spectrum deal

Telecommunications stocks sold off on Friday 9 October after Elon Musk's SpaceX announced an agreement to purchase a nationwide spectrum portfolio, aiming to expand its Starlink internet into mobile service, according to CNBC. Verizon closed down 8.75%, which CNBC reported was its worst day since July 2002. T-Mobile dropped 13.27% and AT&T fell 9.81%, their worst days since 2013 and 2000 respectively, CNBC reported. MarketWatch reported the sector saw its worst daily drops in over a decade.

SpaceX announced the agreement in a statement on Thursday, 8 October, according to CNBC. The deal includes acquiring spectrum — the radio airwaves wireless networks use — from Grain Management. SpaceX described the Grain portfolio as a "license portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band," CNBC reported.

FCC Chair Brendan Carr, whose agency will oversee approval of the deal, told CNBC that competition in the spectrum market was "really good news for the American consumers." "We're probably going to bring over $100 billion of spectrum into the market over the next two years, so we're seeing a lot of competition," Carr said on CNBC's "Squawk on the Street" on Friday. He added, "It's not for us ultimately to pick winners and losers."

Analysts at Evercore ISI wrote that SpaceX "now has the outline of a real network" alongside its existing satellite capabilities, CNBC reported. JPMorgan wrote that the acquisition made Starlink Mobile's long-term opportunity "more credible." In a Friday note, JPMorgan analysts added that they "continue to see limited near-term risk to U.S. wireless incumbents given the time, infrastructure and capital required to build a competitive terrestrial network."